Fourth Anti-Money Laundering Directive - are you ready?

The European Union’s Fourth Anti-Money Laundering Directive (EU4MLD) was implemented into UK law on 26 June 2017.

Updated legislation includes the Money Laundering Regulations, Policing and Crime Act and the Proceeds of Crime Act.

The directive includes fundamental changes to AML procedures at law firms, including changes to Customer Due Diligence (CDD) and a strong focus on Risk Assessments.

In order for you to be compliant with this new directive, we are delighted to offer you AML Search v4. This search represents a leap forward in the streamlining and simplifying of a your CDD procedures which dramatically reduces both the time and cost of Anti-Money Laundering regulatory compliance.

Copies of identity documents are no longer adequate on their own for Simplified Due Diligence

Sanctions and Politically Exposed People (PEP) screening required for ALL clients. electronically

All clients must be risk assessed, with all risk assessments documented

Regulatory and Legal/Criminal penalties for non-compliance - up to £1,000,000 and increases in prison sentences from 2 to 7 years, where ‘…the person has breached a prohibition, or failed to complywith an obligation, that is imposed by or under financialsanctions legislation,’ (s.146 ‘Policing and Crime Act 2017)

CDD records must be kept and made available to regulators within 48 hours, if requested

On-going Due Diligence monitoring for all Clients

Record keeping requirements for all firms (both retention and deletion)

What is changing?

Under EU3MLD and the current Money Laundering Regulations, firms could automatically apply simplified CDD under certain circumstances.

Under the new regulations, however, firms will be able to use these circumstances as a partial justification for simplified CDDonlyafter conducting a documented risk assessment.

The regulations direct firms to develop risk-based policies, and practitioners to conduct Client risk assessments as a part of their CDD. UK regulations already incorporate a risk-based approach, but the new directive goes considerably further requiring documented Client risk assessments.

The regulations are clear. There is no longer an automatic exemption from undertaking Enhanced Due Diligence (rather than Simplified Due Diligence, which has often been undertaken by simply obtaining a copy of a Client’s Identity documents).

Firms will be required to demonstrate their documented Risk Assessment of Clients and evidence they have identified the Client and screened them against alert sources including Sanctions and Local politically-exposed persons (PEPs).

PEPs must also now be identified and will be subject to the same scrutiny as foreign PEPs.

consider using AML Search v4 – this dramatically reduces both the time and cost of Anti-Money Laundering regulatory compliance

What is AML Search v4?AML Search v4, automates the additional processes required for compliance, making the process as simple for a user, as carrying out an AML Search v2 search. AML Search v4 allows firms to confidently demonstrate their compliance, at any time, with law and regulations, dramatically reducing the time and cost of their regulatory compliance.